Envirotech developer and retailer SECOS Group (ASX: SES) continues to see support from City Councils for their compostable bags designed to divert organic waste from landfills with the City of Melville the latest to engage SECOS products. 

The contract valued at more than $600,000 annually, and with options to renew over the next 3 years, will see SECOS supply 42,000 homes in the West Australian City of Melville with compostable kitchen tidy bags. Subsequently, this will divert millions of tons of organic food and garden waste to be repurposed for soil enrichment with the City of Melville joining 29 other councils that are supplied eco-friendly bioplastic products from SECOS. 

Increased attention has been generated as part of the Australian Councils’ Food Organics and Garden Organics (FOGO) program designed to optimise waste disposal. 

“We are seeing more Councils rolling out additional bin services to collect glass and organics in response to the ongoing recycle crisis,” said SECOS CEO, Ian Stacey. 

“At the same time Councils are taking the opportunity to adopt FOGO schemes which utilize the purchase and roll out of Compostable bags to capture and divert food waste to organic or green bin waste streams.”

“Diverting organic waste away from landfill reduces Council land-fill fees and significantly cuts the release of methane gas produced when food is left to decompose in landfill instead of being diverted to mulch. Research indicates methane is 23 times more harmful than carbon dioxide as a greenhouse gas.” 

Further highlighting the value of SECOS’ bioplastics, the Company has also reported an extension to their FOGO contract with Penrith City Council which runs the largest active waste diversion program amongst Australian city councils. The extension will see SECOS continue supplying compostable bags to at least the end of 2020. 

Beyond these two contracts, SECOS is undergoing tender processes with other City councils around Australia to supply compostable bags with the value of the tenders potentially valued at more than $2 million per annum if successful. 

For the Quarter ending 31 March 2020, SECOS reported sales of $6.4m, a 9.8% increase on their December Quarter despite temporary plant closures in China and Malaysia impacting performance. 

Shares in SES responded well to the new contract wins, reaching an intraday high of $0.064, a 14.8%% rise on the previous day’s close of $0.056.